Reporters Put Consumer Confidence Numbers Into Context

After news broke Tuesday that the national Consumer Confidence Index had fallen 19 points this month, business reporters at numerous media outlets jumped on the story.

Reporting that news was one thing. Assessing the numbers and providing enough background information and important sources to put the news into proper context for readers took more initiative.

Reporters interviewed for this piece researched historical data, sought unusual sources for a business news story and looked for other elements to explore the deeper issue at hand -- the long-term effects of the recent hurricanes and rising gas prices on the United States economy.

"All of these things are going on now and it's really on people's minds," says Helen Huntley, personal finance editor for The St. Petersburg Times. "So it's [the monthly index report] a bigger story than it normally is."

Huntley approached the news as such, expanding her reporting. Aside from quoting the Consumer Research Center 's director, she spoke to the director of the Florida Consumer Confidence Survey and inserted the thoughts of several local readers into her story, "Consumer Confidence Takes Dive," published on Wednesday. The paper also ran a detailed chart highlighting the consumer index's movement since 1990.

Each of those efforts helped Huntley explain the significance of the recent drop and give readers a better perspective on it.

Her piece also benefited from another project she was working on -- about the impact of widespread price increases on local consumers' spending habits and lifestyles. For that report, Huntley sought reader feedback by including a digest in the paper's business section and posting a forum on its Web site. The latter endeavor yielded more than 100 notes from readers, illustrating an important lesson.

"We had good results, a lot of feedback" overall, Huntley says. "But by far the best feedback came from the Web."

For example, Clearwater resident Rita Webb and Tampa 's Kandi Byrd provided concrete examples of why the consumer index sunk.

"I've been hitting up the thrift shops and consignment shops more often," Webb wrote, "and trying to keep way from the mall."

"I've cut back my Christmas gift list," Byrd wrote. "I'm going to be doing baked gifts and handmade crafts instead of store-bought items."

Michael E. Kanell also turned to regular people as sources for his report on the index drop for The Atlanta Journal-Constitution ("Consumer confidence plunges"). But he cautions against using them too often for business stories.

Kannell says that using everyday people can become somewhat of an obsession. "It diverts reporting time and writing time and sometimes turns the story into something of an anecdote."

But "it gives an illustration of the data," Kanell adds. "When done right, I think it really adds to the story…It gives the reader someone to empathize with."

Kanell balanced his report with solid research, readings many analysts' reactions and summarizing for readers that they are skeptical of consumer surveys.

Chris Isidore included a similar precaution in his piece for CNN/Money ("Confidence near two-year low"). Despite the consumer index drop, Isidore notes, the stock market experienced little change. That is one reason why, as economist Steven Wieting told him, consumer index numbers are not usually a strong indication of the economy's long-term performance.

"It's an explanatory quote," Isidore says. "This [consumer index] number seems shocking but it's not a big market mover."

Instead, next week's new unemployment data will likely be more significant, Isidore says. Thus it was important to explain to readers that, despite the historic drop in the consumer index, there is no reason to panic.

"This is a survey," Isidore says. "It's watched because people want to know what consumers are thinking. But it's a poll so it's not as important as a lot of economic numbers might be."

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism